Construction of Instruments: Four Corners Canon

摘要

In 1975, Appellants' predecessors convey the surface estate of a tract to Consolidated Coal Company (Consol). Although the minerals underlying the tract are owned by the federal government, Consol agrees to pay to Appellants' predecessors, as part of the consideration for the property, a surface royalty on coal removed. Consol never obtains a coal lease from the federal government and subsequently sells its interest in the surface estate. Through a series of conveyances Jacobs Ranch Coal Company (Jacobs Ranch) takes title to the surface estate. In 1998, Jacobs Ranch leases its surface rights to Thunder Basin Coal Company (Thunder Basin). Thunder Basin obtains a coal lease from the federal government and begins mining operations. Appellants then bring this suit to recover the surface royalty referred to in the 1975 conveyance. In response, Thunder Basin files for a motion to dismiss and judgment on the pleadings. The trial court finds in Thunder Basin's favor: (1) because Consol did not mine the coal; and (2) because Consol's successors are not obligated to pay the surface royalty because the surface-royalty obligation did not run with the land. Held: affirmed. The Supreme Court of Wyoming reviews the trial court's determinations largely on contract principles. The court finds that that language of 1975 deed is clear and unequivocal and supports the district court's ruling that Consol is not liable to pay the surface royalty because it did not mine the coal. Next, the court considers whether the surface-royalty provision is appurtenant to the surface, thereby obliging Consol's successors in interest to pay the surface royalty. The court finds that the Appellants failed to establish that the original parties intended the surface-royalty covenant to run with the land. Acknowledging that the surface-royalty provision referred to Consol specifically and not its successors in interest, the court notes that the plain language of the 1975 deed limits the obligation to pay a surface royalty to coal mined, removed, and sold by Consol. Because the phrase indicates an obligation that is personal between the Appellant's predecessors in interest and Consol, the surface royalty is personal to the parties and does not run with the land. Accordingly, the Appellants failed to raise a question of material fact and the district court properly granted judgment as a matter of law.